The Law of Institutional Investment Management

Lodewijk D. Van Setten

The Law of Institutional Investment Management explains the custom and practice of the investment management business with reference to both US and English law.

The work addresses the implementation of investment strategies by the investment manager, the infra-structure of the global financial markets, and the custody and administration of the assets which are entrusted to the manager. In this context, the book defines the various risks and pit-falls that confront institutional participants in financial markets, with an emphasis on the position (and protection) of the institutional investor.

The Law of Institutional Investment Management

Lodewijk D. Van Setten

Description

The Law of Institutional Investment Management fills a gap for a work that describes the custom and practice of the investment management business with reference to both English and New York law.

The work addresses the implementation of investment strategies by the manager, the infra-structure of the global financial markets (trading, clearing and settlement), and the custody and administration of the assets which are entrusted to the manager. In this context, the book seeks to define the various risks and pitfalls that confront the institutional participants in the financial markets, with an emphasis on the position (and protection) of the institutional investor.

Three focal points are looked at in detail: (i) a description of the investment management industry and the infra-structure of the financial markets; (ii) an analysis of the professional responsibility of the investment manager for the making of investment decisions; and (iii) an analysis of the professional responsibility of the investment manager for: implementing investment decisions through the use of broker-dealers ("front office" activities), and settling trades through the client's custodian ("back-office" activities).

The Law of Institutional Investment Management

Lodewijk D. Van Setten

Table of Contents

Part I: Investment in Financial Instruments 1. Financial Instruments2. Financial MarketsPart II: The Legal Nature of Entitlements to Securities Deposited by the Issuer with a Central Securities Depositary 3. Securities Settlement Systems4. Securities Accounts5. Transfer of Book-Entry SecuritiesPart III: The Services of the Investment Manager 6. Responsibilities of the Investment Manager7. Nature of Investment Management Relationship and Standard of Care8. Financial Regulation of the Investment Management BusinessPart IV: The Investment Objective and Investment Restrictions 9. Investment Strategies10. Function of Investment Restrictions11. Liability of the Investment Manager for Breach of Investment Restrictions12. Liability of the Investment Manager for UnderperformancePart V: Execution and Settlement of Investment Transactions 13. Liability of the Investment Manager in Connection with the Execution of Investment Transactions14. Liability of the Investment Manager in Connection with the Settlement of Investment TransactionsPart VI: Recording and Reporting Transactions 15. Recording Transactions16. Reporting Transactions and Performance17. Role and Responsibilities of the Compliance OfficerPart VII: Capita Selecta 18. Outsourcing19. Securities Lending20. Where the Institutional Client is a Collective Investment Scheme21. Where the Institutional Client is a Retirement Benefit Scheme

The Law of Institutional Investment Management

Lodewijk D. Van Setten

Author Information

Lodewijk van Setten is International Counsel and Managing Director of Morgan Stanley Investment Management in London. He has wide-ranging experience in advising financial institutions and institutional investors on all legal and regulatory aspects of transactions in the financial markets. He regularly publishes on these matters and teaches on the topic of financial markets at King's College, University of London, where he is a visiting professor. Prior to joining Morgan Stanley, he held positions in private practice in The Netherlands and the UK, and he was European Counsel of State Street Global Advisors.

Professor Van Setten holds an LLB and a PhD from the University of Utrecht, The Netherlands, and an LLM from Duke University, NC, USA, where he was a Special Staff Editor of the Duke Journal of Comparative International Law. He was admitted as advocaat in The Netherlands in 1993, as attorney-at-law in the State of New York in 1994, and as solicitor in England and Wales in 2002.